Onkyo And Sound United Deal Runs Out Of Time
Sound United is no longer acquiring Onkyo through mutual agreement.
Back in May Sound United LLC announced the signing of a term sheet agreement to acquire Onkyo Corporation's consumer audio division, including the Onkyo, Pioneer, Pioneer Elite, and Integra brands.
Original deal
Onkyo agreed to assign its Home AV related business to Sound United to focus its business resources and technology in Digital Life portable products and OEM products and services targeting the B2B space.
Onkyo's rationale was combining the company's world-class premium brands, engineering and manufacturing capabilities with Sound United LLC's ("Sound United") strong portfolio of Denon, Polk Audio, Marantz, Definitive Technology, HEOS, Classé, and Boston Acoustics would position the new group to capture the future growth of music and entertainment in the home.
The arrangement would have allowed Onkyo to continue to capture the growth of this business through future licensing royalties. Therefore, on May 21 2019, Onkyo entered into an Agreement with Viper Holdings, the holding company of Sound United, and the transfer was approved by Onkyo shareholders at the general meeting of shareholders on June 26, 2019.
However, the completion of the transaction was subject to several conditions which appeared not to have been sorted.
Parting but still interested
At this point, as stated in press releases from both parties, Onkyo and Viper Holdings have mutually agreed to terminate the transfer based on the determination that closing cannot be achieved by November 30, 2019, the expiration date of the agreement.
The upshot of this latest development is that both have mutually agreed that it is in the best interest of the organisations to terminate the proposed acquisition.
StereoNET has been informed that Onkyo still believes in the value of combining these businesses and will remain open to future discussions should conditions change. However, for now, Onkyo has determined that it is time for the organisation to return to dedicating its attention and resources to running its Home AV business independently.
Sound United also remains dedicated to its mission of Bringing Joy to the World Through Sound.
Jay Garrett
StereoNET’s resident rock star, bass player, and gadget junkie. Jay heads up StereoNET as Editor for the United Kingdom and Europe regions. His passion for gadgets and Hi-Fi is second only to being a touring musician.
Posted in: Industry
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